Press Release
January 8, 2010

Loren seeks probe of 'failed' irrigation project in Leyte

Senator Loren Legarda vowed yesterday to look into a $41.67 million irrigation project in the province of Leyte which was declared a failure by the Asian Development Bank (ADB), a Manila-based multilateral financing institution.

The chair of the Senate Food and Agriculture Committee and the Congressional Oversight Committee on Agriculture and Fisheries Modernization (COCAFM), Loren, noted with dismay that an independent evaluation conducted by ADB on the 2nd Irrigation Systems Improvement project deemed it "inefficient" and "unsustainable" in attaining its objectives, including lowering poverty in Leyte from 72 percent to 42 percent.

"We must look deeper into this project, more so since ADB said, citing the project completion report (PCR), that only 11,500 hectares had been irrigated against the target of 15,415 hectares and that the project's sustainability had received a low rating of 55 percent," said Loren.

Loren stressed that foreign-funded projects that fail to meet their purposes deal Filipinos a double whammy because of the unrealized goals and the fact that it is the taxpayers who ultimately pay for the projects' costs.

The senator also wondered why the service cooperatives made up by farmers and irrigators were, as per ADB's own report, "acted in effect as paid labor, but with an hourly rate well below the market level."

"NIA had severe budgetary constraints and [its] failure to take steps to reduce administrative costs left it unable to carry out routine maintenance as regularly as required. The project had failed, therefore, to institute appropriate measures," said ADB.

Loren said that the relegation of cooperatives into mere underpaid labor ran against the very intent not only of the project but of a number of laws empowering cooperatives, as well as micro, small and medium enterprises (MSMEs). She said that irrigation of farmlands is most important if the productivity of Filipino farmers is to increase.

The ADB said that had the project been successful, it would have increased by 50 percent the average family income in Leyte, thereby reducing the incidence of poverty in the province to below 42 percent from its present 72 percent.

Loren said she would also like to know why the project completion report noted an increase of $1.66 million which it attributed to the withholding by NIA of five (5) percent of project funds, "which had not been allowed for at appraisal."

The senator said that aside from irrigation, Filipino farmers also need government support in seeds and fertilizer procurement, technical support on farm management, as well as access to post-harvest facilities for such activities like threshing, milling, drying and or processing of produce. "However, the Department of Agriculture, lead department in the implementation of the Agriculture and Fisheries Modernization Act of 1997 or AFMA, should distribute rationally these allowable AFMA subsidies based on need and potential of the areas-with priority on impoverished farmers and farmers' organizations-- within the Strategic Agriculture and Fisheries Development Zones (SAFDZs). My finance sub-committee approved the PhP800-million budget for the identification of these zones which are planning and implementation tools. "When the amended Agri-Agra Law is in place, I hope poor farmers can have easy access to credit for all their production and marketing needs.", Loren said.

Leyte depends on agriculture, with rice being farmed in the lower flatter areas specifically those around Tacloban. Coconut farming for coconut oil is the main cash crop of the more mountainous areas.

The ADB report noted a series of delays in the irrigation project, starting with a 16-month delay in loan effectiveness, followed by a period of very slow activity during the first three years.

"Ultimately, the project implementation period was extended by one year. While part of this arose from the incorporation into the project of the Marabong Dam, the completion report also blamed delays and shortfalls in local budgets, and delays in procurement, difficult weather conditions, and attempts to schedule construction so that it caused the least possible disruption to cropping."

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